Telefonica said it now expects modest growth in revenues over the full year, after improving trends in the second quarter. Quarterly revenues rose 1.9 percent year-on-year to EUR 12.960 billion, with organic growth improving to 3.1 percent from 1.5 percent in Q1. All its main markets - Spain, Germany, Brazil showed an improved performance in the quarter. Across the group, both service revenue (+2.9% y-o-y organic) and handset sales (+5.2%) accelerated compared to the previous quarter.
As a result Telefonica expects sales to grow over 1.5 percent in the full year, better than its previous forecast of stable revenue. The OIBDA margin is still expected to increase up to 1 percent points, after a 0.6 percent increase in H1, and capex, excluding spectrum, will reach around 16 percent of revenue, after 13.4 percent in the first half.
In Q2, OIBDA grew 6.1 percent to EUR 4.158 billion, and the margin was up by 1.3 percent points to 32.1 percent. Net profit rose 18.4 percent to EUR 821 million, helped by a small drop in financing costs and taxes.
Telefonica reduced capital expenditure slightly in the first half of 2017, to EUR 3.507 billion, with spending focused on 4G and fibre expansion. This helped operating cash flow improve 13.9 percent to EUR 4.672 billion. Free cash flow doubled year-on-year to EUR 1.620 billion, helping reduce net debt to EUR 48.487 billion at the end of June.
